Big Companies and Telecommuting

One of the biggest benefits most communities see when the first get good broadband is the ability for people to telecommute or work from home. Communities that get broadband for the first time report that this is one of the most visible changes made in the community and that soon after getting broadband almost every street and road has somebody working from home.

CCG is a great example of telecommuting and our company went virtual fifteen years ago. The main thing that sent us home in those days was that residential broadband was better than what we could get at the office. All of our employees could get 1 – 2 Mbps broadband at home and that was also the only speed available at our offices over a T1. But we found that even in those early days that a T1 was not enough speed to share among multiple employees.

Telecommuting really picked up at about the same time that CCG went virtual. I recall that AT&T was an early promoter of telecommuting as was the federal government. At first these big companies let employees work at home a day or two a week as a trial. But that worked out so well that over time big organizations felt comfortable with people working out of their homes. I’ve seen a number of studies that show that telecommuting employees are more productive than office employees and work longer hours – due in part to not have to commute. Telecommuting has become so pervasive that there was a cover story in Forbes in 2013 announcing that one out of five American workers worked at home.

Another one of the early pioneers in telecommuting was IBM. A few years ago they announced that 40% of their 380,000 employees worked outside of traditional offices. But last week the company announced that they were ending telecommuting. They told employees in many of their major divisions like Watson development, software development and digital marketing and design that they must move back into a handful of regional offices or leave the company.

The company has seen decreasing revenues for twenty straight quarters and there is speculation that this is a way to reduce their work force without having to go through the pain of choosing who will leave. But what is extraordinary about this announcement is how rare it is. It’s only the second major company that has ended telecommuting in recent memory, the last being Yahoo in 2013.

Both IBM and Yahoo were concerned about earnings and that is probably one of the major reasons that drove their decision to end telecommuting. It seems a bit ironic that companies would make this choice when it’s clear that telecommuting saves money for the employer – something IBM crowed about earlier this year.

Here are just a few of the major findings that have been done about the benefits of telecommuting. It’s improves employee morale and job satisfaction. It reduces attrition, reduces sick and unscheduled leave. It saves companies on office space and overhead costs. It reduces discrimination by equalizing people by personality and talent rather than race, age or appearance. It increases productivity by eliminating unneeded meetings and because telecommuters work more hours than office workers.

But there are downsides. It’s hard to train new employees in a telecommuting environment. One of the most common ways to train new people is to have them spend time with somebody more experienced – something that is difficult with telecommuting. Telecommuting makes it harder to brainstorm ideas, something that benefits from live interaction. And possibly the biggest drawback is that telecommuting isn’t for everybody. Some people cannot function well outside of a structured environment.

As good as telecommuting is for companies it’s even better for smaller and rural communities. A lot of people want to live in the communities they grew up in, around friends and family. We’ve seen a brain drain from rural areas for decades as kids graduate from high school or college and are unable to find meaningful work. But telecommuting lets people live where there is broadband. Many communities that have had broadband come to town report that they see an almost instant uptick in housing prices and demand for housing. And part of that increased demand is from those who want to choose a community rather than follow a job.

One of the more interesting projects I’ve worked on with the telecommuting issue was when I helped the city of Lafayette, Louisiana get a fiber network. Lafayette is not a rural area but a thriving mid-size city, and yet one of the major reasons the residents wanted fiber was the chance to keep their kids at home. The area is largely Cajun with a unique culture and the community was unhappy to see their children have to relocate to larger cities to get jobs after graduating from the university there. Broadband alone can’t fix that kind of problem, but Lafayette is reportedly happy with the changes brought from the fiber network. That’s the kind of benefit that’s hard to quantify in dollar terms.

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